PURCHASE AGREEMENT

 

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                                                                    Exhibit 10.1

 

                             NORCRAFT HOLDINGS, L.P.

 

                             NORCRAFT FINANCE CORP.

 

               $150,000,000 9% Senior Subordinated Notes due 2011

 

                               PURCHASE AGREEMENT

 

                                                                October 10, 2003

                                                              New York, New York

 

UBS Securities LLC

Wachovia Capital Markets, LLC

c/o UBS Securities LLC

299 Park Avenue

New York, New York 10171

 

Ladies and Gentlemen:

 

          Norcraft Holdings, L.P., a Delaware limited partnership ("Holdings"),

and Norcraft Finance Corp., a Delaware corporation ("Co-Issuer"), agree with you

as follows:

 

          1. Issuance of Notes. Upon consummation of the acquisition (the

"Acquisition") by Holdings of 100% of the outstanding membership units of

Norcraft Companies, L.P. (the "Company") on the terms set forth in that certain

Unit Purchase Agreement, dated as of August 29, 2003, among Holdings'

predecessor, the Company's predecessor and the sellers and sellers'

representatives named therein (as amended on October 3, 2003, the "UPA"), the

Company and the Co-Issuer propose to issue and sell to UBS Securities LLC (the

"Representative") and Wachovia Capital Markets, LLC (together with the

Representative, the "Initial Purchasers") $150,000,000 aggregate principal

amount of 9% Senior Subordinated Notes due 2011 (the "Original Notes"). The

Original Notes will be issued pursuant to an indenture (the "Indenture"), to be

dated the Closing Date (as defined herein), by and among the Company, the

Co-Issuer, the Guarantor (as defined below) and U.S. Bank National Association,

as trustee (the "Trustee"). The Company's obligations under the Original Notes

will be unconditionally guaranteed (the "Guarantee") on an unsecured senior

subordinated basis by Norcraft Canada Corporation, a Nova Scotia unlimited

liability company that will be contributed to the Company after the date of this

Agreement (the "Guarantor" and, together with Holdings, the Company and the

Co-Issuer, the "Issuers"; provided, that with respect to any right, obligation

or agreement set forth in this Agreement that is to be performed (i) prior to

the execution of the Joinder Agreement (as defined below) by the Company and the

Guarantor, the term Issuers shall refer only to Holdings and the Co-Issuer and

(ii) following the execution of the Joinder Agreement by the Company and the

Guarantor, the term Issuers shall

 

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refer only to the Company, the Co-Issuer and the Guarantor). All references

herein to the Original Notes include the related Guarantee, unless the context

otherwise requires. Capitalized terms used but not otherwise defined herein

shall have the meanings given to such terms in the Indenture.

 

          The Original Notes will be offered and sold to the Initial Purchasers

pursuant to an exemption from the registration requirements under the Securities

Act of 1933, as amended (the "Act"). The Issuers have prepared a preliminary

offering memorandum, dated September 30, 2003 (the "Preliminary Offering

Memorandum"), and a final offering memorandum dated October 10, 2003 and

available for distribution on or about the date hereof (the "Offering

Memorandum") relating to the Issuers and the Original Notes.

 

          The Initial Purchasers have advised the Issuers that the Initial

Purchasers intend, as soon as they deem practicable after this Purchase

Agreement (this "Agreement") has been executed and delivered, to resell (the

"Exempt Resales") the Original Notes purchased by the Initial Purchasers under

this Agreement in private sales exempt from registration under the Act on the

terms set forth in the Offering Memorandum, as amended or supplemented, solely

to (i) persons whom the Initial Purchasers reasonably believe to be "qualified

institutional buyers," as defined in Rule 144A under the Act ("QIBs"), and (ii)

other eligible purchasers pursuant to offers and sales that occur outside the

United States within the meaning of Regulation S under the Act; the persons

specified in clauses (i) and (ii) are sometimes collectively referred to herein

as the "Eligible Purchasers."

 

          Upon issuance of the Original Notes and until such time as the same is

no longer required under the applicable requirements of the Act, the Original

Notes shall bear the legend relating thereto set forth under "Notice to

investors" in the Offering Memorandum.

 

           Holders (including subsequent transferees) of the Original Notes will

have the registration rights set forth in the registration rights agreement (the

"Registration Rights Agreement") to be dated the Closing Date in form and

substance reasonably satisfactory to the Initial Purchasers and conforming to

the description thereof in the Offering Memorandum, for so long as such Original

Notes constitute "Registrable Notes" (as defined in the Registration Rights

Agreement). Pursuant to the Registration Rights Agreement, the Issuers will

agree to (i) file with the Securities and Exchange Commission (the "Commission")

under the circumstances set forth in the Registration Rights Agreement, (a) a

registration statement under the Act (the "Exchange Offer Registration

Statement") relating to a new issue of debt securities (collectively with the

Private Exchange Notes (as defined in the Registration Rights Agreement), the

"Exchange Notes" and, together with the Original Notes, the "Notes," which term

includes any guarantee thereof by the Guarantor) to be offered in exchange for

the Original Notes (the "Exchange Offer") and issued under the Indenture or an

indenture substantially identical to the Indenture and/or (b) under certain

circumstances set forth in the Registration Rights Agreement, a shelf

registration statement pursuant to Rule 415 under the Act (the "Shelf

Registration Statement" and, together with the Exchange Offer Registration

 

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Statement, the "Registration Statements") relating to the resale by certain

holders of the Original Notes, and (ii) use reasonable best efforts to cause

such Registration Statements to be declared effective. This Agreement, the

Original Notes, the Guarantee, the Indenture and the Registration Rights

Agreement are hereinafter sometimes referred to collectively as the "Note

Documents."

 

          The Original Notes are being offered and sold by the Company and the

Co-Issuer in connection with the consummation of the Acquisition. In connection

with the Acquisition, (i) an investor group led by SKM Equity Fund III, L.P. and

Trimaran Fund II, L.L.C., will contribute cash to Norcraft Holdings L.P. in

return for its limited partnership units; (ii) Mark Buller and his relatives

will contribute cash and 100% of the outstanding equity interests of the

Guarantor (which shall be the owner of the Winnipeg manufacturing facility

described in the Offering Memorandum); (iii) certain members of the Company's

senior management will exchange a portion of their membership units in the

Company for limited partnership units of Norcraft Holdings, L.P. and exchange

all or a portion of cash bonuses relating to the Acquisition in consideration

for the right to receive additional limited partnership units of Norcraft

Holdings L.P.; and (iv) the proceeds received by Norcraft Holdings L.P. from the

transactions referred to in the foregoing clauses (i) and (ii) will be used to

pay a portion of the consideration for the Acquisition and/or will be

contributed to the Company as described in the Offering Memorandum (the

transactions referred to in clauses (i) through (iii), the "Equity Financing").

In addition, on the Closing Date the Company will repay all outstanding

borrowings under the Company's existing senior secured credit facility (the

"Existing Credit Agreement") and enter into a new $70.0 million senior secured

credit facility (the "New Credit Agreement") with UBS AG, Stamford Branch, as

administrative agent and the lenders party thereto (collectively, the

"Refinancing") as described in the Offering Memorandum.

 

          The offering of the Original Notes, the Equity Financing, the

Refinancing, the Acquisition, the employment of Mark Buller by the Company on

the terms set forth in the Offering Memorandum and the payment of fees and

expenses relating to the foregoing are collectively referred to as the

"Transactions." The Note Documents, the New Credit Agreement and the letters of

credit, notes, security documents and other agreements relating thereto and the

documents relating to the Acquisition and the Equity Financing are collectively

referred to herein as the "Transaction Documents."

 

          Simultaneous with the closing of the Transactions, the Company and the

Guarantor shall each enter into a joinder agreement (the "Joinder Agreement") to

this Agreement, substantially in the form of Exhibit A hereto, pursuant to which

each such entity will observe and perform all of the rights, obligations and

liabilities of an Issuer as provided in this Agreement as if it were an original

signatory hereto. Upon effectiveness of the Joinder Agreement with respect to

the Company and the Guarantor, Holdings shall be fully and unconditionally

released from all rights, obligations and liabilities hereunder and all such

rights,

 

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obligations and liabilities shall thereafter be the rights, obligations and

liabilities of the Company, the Co-Issuer and the Guarantor.

 

          2. Agreements to Sell and Purchase. On the basis of the

representations, warranties and covenants contained in this Agreement, on the

Closing Date, the Company and the Co-Issuer agree to issue and sell to each

Initial Purchaser, and on the basis of the representations, warranties and

covenants contained in this Agreement and subject to the terms and conditions

contained in this Agreement, each Initial Purchaser severally agrees to purchase

from the Issuers, the aggregate principal amount of the Original Notes set forth

opposite its name in Schedule I hereto. The purchase price for the Original

Notes shall be 97.0% of their principal amount.

 

          3. Delivery and Payment. Delivery of, and payment of the purchase

price for, the Original Notes shall be made at 10:00 a.m., New York City time,

on October 21, 2003 (such date and time, the "Closing Date") at the offices of

Ropes & Gray LLP, 45 Rockefeller Plaza, New York, New York 10111-0087. The

Closing Date and the location of delivery of and the form of payment for the

Original Notes may be varied by mutual agreement between the Initial Purchasers,

the Company and the Co-Issuer.

 

          All of the Original Notes shall be delivered by the Company and the

Co-Issuer to the Initial Purchasers (or as the Initial Purchasers direct)

through the facilities of The Depository Trust Company, against payment by the

Initial Purchasers of the purchase price therefor by means of wire transfer of

immediately available funds to such account or accounts specified by the Issuers

on or prior to the Closing Date, or by such means as the parties hereto shall

agree prior to the Closing Date. The Original Notes shall be evidenced by one or

more certificates in global form registered in such names as the Initial

Purchasers may request upon at least one business day's notice prior to the

Closing Date and having an aggregate principal amount corresponding to the

aggregate principal amount of the Original Notes.

 

          4. Agreements of the Issuers. The Issuers, jointly and severally,

covenant and agree with the Initial Purchasers as follows:

 

          (a) To furnish the Initial Purchasers and those persons identified by

     the Initial Purchasers, without charge, with as many copies of the

     Preliminary Offering Memorandum and the Offering Memorandum, and any

     amendments or supplements thereto, as the Initial Purchasers may reasonably

     request. Holdings, the Company and the Co-Issuer consent to the use of the

     Preliminary Offering Memorandum and the Offering Memorandum, and any

     amendments and supplements thereto required pursuant to this Agreement, by

     the Initial Purchasers in connection with Exempt Resales.

 

          (b) Not to make any changes to the information contained in the

     Offering Memorandum from the corresponding information contained in the

     Preliminary Offering Memorandum other than (i) changes to reflect pricing

     information with respect

 

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     to the Notes and (ii) such other changes as to which the Representative

     shall have consented. Not to amend or supplement the Offering Memorandum

     prior to the Closing Date unless the Initial Purchasers shall previously

     have been advised of such proposed amendment or supplement at least two

     business days prior to the proposed use and shall not have objected to such

     amendment or supplement.

 

          (c) If, prior to the time that the Initial Purchasers have completed

     their distribution of the Original Notes, any event shall occur that, in

     the judgment of the Company or in the judgment of counsel to the Initial

     Purchasers, makes any statement of a material fact in the Offering

     Memorandum, as then amended or supplemented, untrue or that requires the

     making of any additions to or changes in the Offering Memorandum in order

     to make the statements in the Offering Memorandum, as then amended or

     supplemented, in the light of the circumstances under which they are made,

     not misleading, or if it is necessary to amend or supplement the Offering

     Memorandum to comply with applicable law, the Company shall promptly notify

     the Initial Purchasers of such event and (subject to Section 4(b)) prepare

     an appropriate amendment or supplement to the Offering Memorandum so that

     (i) the statements in the Offering Memorandum, as amended or supplemented,

     will, in the light of the circumstances at the time that the Offering

     Memorandum is delivered to prospective Eligible Purchasers, not be

     misleading and (ii) the Offering Memorandum will comply with applicable

     law.

 

          (d) To qualify or register the Original Notes under the securities

     laws of such jurisdictions as the Initial Purchasers may request and to

     continue such qualification in effect so long as required for the Exempt

     Resales. Notwithstanding the foregoing, no Issuer shall be required to

     qualify as a foreign corporation in any jurisdiction in which it is not so

     qualified or to execute a general consent to service of process in any such

     jurisdiction or subject itself to taxation in excess of a nominal dollar

     amount in any such jurisdiction where it is not then so subject.

 

          (e) To advise the Initial Purchasers promptly and, if requested by the

     Initial Purchasers, to confirm such advice in writing, of the issuance by

     any securities commission of any stop order suspending the qualification or

     exemption from qualification of any of the Original Notes for offering or

     sale in any jurisdiction, or the initiation of any proceeding for such

     purpose by any securities commission or other regulatory authority. The

     Issuers shall use their reasonable best efforts to prevent the issuance of

     any stop order or order suspending the qualification or exemption of any of

     the Original Notes under any securities laws, and if at any time any

     securities commission or other regulatory authority shall issue an order

     suspending the qualification or exemption of any of the Original Notes

     under any securities laws, the Issuers shall use their reasonable best

     efforts to obtain the withdrawal or lifting of such order at the earliest

     possible time.

 

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          (f) Whether or not the transactions contemplated by this Agreement are

     consummated or this Agreement becomes effective or is terminated, to pay

     all costs, expenses, fees, disbursements (including fees, expenses and

     disbursements of counsel to the Issuers) reasonably incurred and stamp,

     documentary or similar taxes incident to and in connection with: (i) the

     preparation, printing and distribution of the Preliminary Offering

     Memorandum and the Offering Memorandum and all amendments and supplements

     thereto, (ii) all expenses (including travel expenses) of the Issuers in

     connection with any meetings with prospective investors in the Original

     Notes, (iii) the preparation, notarization (if necessary) and delivery of

     the Note Documents and all other agreements, memoranda, correspondence and

     documents prepared and delivered in connection with this Agreement and with

     the Exempt Resales, (iv) the issuance, transfer and delivery by the Company

     and the Co-Issuer and the Guarantors of the Original Notes and the

     Guarantee, respectively, to the Initial Purchasers, (v) the qualification

     or registration of the Notes for offer and sale under the securities laws

     of the several states of the United States or provinces of Canada

     (including, without limitation, the cost of printing and mailing

     preliminary and final Blue Sky or legal investment memoranda and fees and

     disbursements of counsel (including local counsel) to the Initial

     Purchasers relating thereto), (vi) the furnishing of such copies of the

     Preliminary Offering Memorandum and the Offering Memorandum, and all

     amendments and supplements thereto, as may be reasonably requested for use

     in connection with Exempt Resales, (vii) the preparation of certificates

     for the Notes, (viii) the application for quotation of the Notes in The

     Portal Market ("Portal") of the National Association of Securities Dealers,

     Inc. ("NASD"), including, but not limited to, all listing fees and

     expenses, (ix) the approval of the Notes by The Depository Trust Company

     ("DTC") for "book-entry" transfer, (x) the rating of the Notes by rating

     agencies, (xi) the fees and expenses of the Trustee and its counsel and

     (xii) the performance by the Issuers of their other obligations under the

     Note Documents. In addition, if the transactions contemplated by this

     Agreement are not consummated or this Agreement is terminated other than by

     reason of a default by either of the Initial Purchasers, the Issuers shall

     pay the fees, expenses and disbursements of counsel to the Initial

     Purchasers.

 

          (g) To use the proceeds from the sale of the Original Notes, the

     Equity Financing and initial borrowings under the New Credit Agreement in

     substantially the manner described in the Offering Memorandum under the

     caption "Use of proceeds."

 

          (h) To use their reasonable best efforts to do and perform all things

     required to be done and performed under this Agreement by them prior to or

     after the Closing Date and to satisfy all conditions precedent on their

     part to the delivery of the Original Notes.

 

          (i) Not to, and not to permit any of their subsidiaries to, sell,

     offer for sale or solicit offers to buy any security (as defined in the

     Act) that would be integrated

 

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     with the sale of the Original Notes in a manner that would require the

     registration under the Act of the sale of the Original Notes to the Initial

     Purchasers or any Eligible Purchasers.

 

          (j) Not to permit any Issuer to, and to cause their other affiliates

     (as defined in Rule 144 under the Act) not to resell any of the Original

     Notes that have been reacquired by any of them, and that constitute

     "restricted securities" under Rule 144, other than to an Issuer or an

     affiliate of any Issuer for a period of two years after the Closing Date.

 

          (k) Not to engage, not to allow any of their subsidiaries to engage,

     and to cause their other affiliates and any person acting on their behalf

     (other than, in any case, the Initial Purchasers and any of their

     affiliates, as to whom the Company and the Co-Issuer make no covenant) not

     to engage, in any form of general solicitation or general advertising

     (within the meaning of Regulation D under the Act) in connection with any

     offer or sale of the Original Notes in the United States prior to the

     effectiveness of a registration statement with respect to the Original

     Notes.

 

          (l) Not to engage, not to allow any of their subsidiaries to engage,

     and to cause their other affiliates and any person acting on their behalf

     (other than, in any case, the Initial Purchasers and any of their

     affiliates, as to whom the Company and the Co-Issuer make no covenant) not

     to engage, in any directed selling effort with respect to the Original

     Notes, and to comply with the offering restrictions requirement of

     Regulation S under the Act. Terms used in this paragraph have the meanings

     given to them by Regulation S.

 

          (m) From and after the Closing Date, for so long as any of the Notes

     remain outstanding and are "restricted securities" within the meaning of

     Rule 144(a)(3) under the Act and during any period in which the Company is

     not subject to Section 13 or 15(d) of the Securities Exchange Act of 1934,

     as amended (the "Exchange Act"), to make available upon request the

     information required by Rule 144A(d)(4) under the Act to (i) any holder or

     beneficial owner of Notes in connection with any sale of such Notes and

     (ii) any prospective purchaser of such Notes from any such holder or

     beneficial owner designated by the holder or beneficial owner. The Company

     and the Co-Issuer will pay the expenses of preparing, printing and

     distributing such documents.

 

          (n) To comply with all of their agreements set forth in the

     Registration Rights Agreement.

 

          (o) To comply with all of their obligations set forth in the

     representations letter of the Issuers to DTC relating to the approval of

     the Original Notes by DTC for "book-entry" transfer and to use their best

     efforts to obtain approval of the Original Notes by DTC for "book-entry"

     transfer.

 

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          (p) To use their reasonable best efforts to effect the inclusion of

     the Original Notes in Portal.

 

           (q) Prior to the Closing Date, to furnish without charge to the

     Initial Purchasers, (i) as soon as they have been received by Holdings, a

     copy of any regularly prepared internal financial statements of the Company

     and its subsidiaries for any period subsequent to the period covered by the

     financial statements appearing in the Offering Memorandum, (ii) copies of

     all other reports and other communications (financial or otherwise) that

     the Company mails or otherwise make available to security holders and (iii)

     such other information as the Initial Purchasers shall reasonably request.

 

          (r) Not to, and not to permit any of their affiliates or anyone acting

     on their or their affiliates behalf to (other than the Initial Purchasers

     and their affiliates), distribute prior to the Closing Date any offering

     material in connection with the offer and sale of the Original Notes other

     than the Preliminary Offering Memorandum and the Offering Memorandum.

 

           (s) During the period of two years after the Closing Date or, if

     earlier, until such time as the Original Notes are no longer restricted

     securities (as defined in Rule 144 under the Act), not to be or become a

     closed-end investment company required to be registered, but not

     registered, under the Investment Company Act of 1940, as amended.

 

          (t) In connection with the offering, until the Initial Purchasers

     shall have notified the Company of the completion of the resale of the

     Notes, not to, and not to permit any of their affiliates (as such term is

     defined in Rule 501(b) of Regulation D under the Act) to, either alone or

     with one or more other persons, bid for or purchase for any account in

     which they or any of their affiliates have a beneficial interest any Notes;

     and none of the Company, the Co-Issuer nor any of their affiliates will

     make bids or purchases for the purpose of creating actual, or apparent,

     active trading in, or raising the price of, the Notes.

 

Notwithstanding anything to the contrary in the covenants contained in

paragraphs, (j), (k), (l), (r) and (t) of this Section 4, solely with respect to

any person who is selling an ownership interest in the Company to Holdings

pursuant to the UPA, the Issuers shall be deemed to have complied with such

covenants with respect to their affiliates if they use their reasonable best

efforts (including through the enforcement of their rights under the UPA) to

cause such person to comply with such covenants.

 

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          5. Representations and Warranties. (a) The Issuers, jointly and

severally, represent and warrant to the Initial Purchasers that:

 

          (i) Each of the Preliminary Offering Memorandum and the Offering

     Memorandum has been prepared for use in connection with the Exempt Resales.

     The Preliminary Offering Memorandum as of its issue date did not, and the

     Offering Memorandum as of its issue date does not and as of the Closing

     Date will not, contain any untrue statement of a material fact or omit to

     state any material fact necessary in order to make the statements therein,

     in the light of the circumstances under which they were made, not

     misleading; provided, however, that no representation or warranty is made

     with respect to information contained in or omitted from the Preliminary

     Offering Memorandum or the Offering Memorandum, as supplemented or amended,

     in reliance upon and in conformity with the information furnished to

     Holdings or the Company in writing by or on behalf of the Representative

     relating to the Initial Purchasers expressly for inclusion in the

     Preliminary Offering Memorandum, the Offering Memorandum or any supplement

     or amendment thereto. No order preventing the use of the Preliminary

     Offering Memorandum or the Offering Memorandum, or asserting that any of

     the transactions contemplated by this Agreement are subject to the

     registration requirements of the Act, has been issued or, to the knowledge

     of the Issuers, threatened.

 

          (ii) There are no securities of the Issuers that are (a) listed on a

     national securities exchange registered under Section 6 of the Exchange Act

     or that are quoted in a United States automated interdealer quotation

     system and (b) of the same class (within the meaning of Rule 144A under the

     Act) as the Notes.

 

          (iii) The Co-Issuer and the Guarantor will be the only subsidiaries,

     direct or indirect, of the Company on the Closing Date. All of the issued

     and outstanding shares of capital stock of the Co-Issuer and, on the

     Closing Date, the Guarantor have been duly and validly authorized and

     issued, are fully paid and nonassessable, were not issued in violation of

     any preemptive or similar rights and, on the Closing Date, are owned by the

     Company free and clear of all Liens (as defined in the Offering Memorandum

     under the caption "Description of the notes-- Certain definitions") (other

     than Permitted Liens (as defined in the Offering Memorandum under the

     caption "Description of the notes-- Certain definitions")). There are no

     outstanding options, warrants or other rights to acquire or purchase, or

     instruments convertible into or exchangeable for, any shares of capital

     stock of the Co-Issuer or the Guarantor. No holder of any securities of the

     Issuers (other than the Notes) is entitled to have such securities

     registered under any registration statement contemplated by the

     Registration Rights Agreement or any other agreement.

 

          (iv) Each of Holdings, the Co-Issuer and, on the Closing Date, the

     Company and the Guarantor (A) is a corporation, partnership or other entity

     duly incorpo-

 

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     rated or formed, validly existing and in good standing under the laws of

     the jurisdiction of its incorporation or formation; as the case may be; (B)

     has all requisite corporate power and authority or all requisite power and

     authority under its partnership agreement and the Delaware Revised Uniform

     Limited Partnership Act, as the case may be, and has all governmental

     licenses, authorizations, consents and approvals, necessary to own its

     property and carry on its business as now being conducted, except where the

     failure to obtain any such license, authorization, consent and approval

     could not reasonably be expected to have, individually or in the aggregate,

     a Material Adverse Effect; and (C) is qualified to do business and is in

     good standing in all jurisdictions in which the nature of the business

     conducted by it makes such qualification necessary, except where the

     failure to be so qualified and in good standing individually or in the

     aggregate could not reasonably be expected to have, individually or in the

     aggregate, a Material Adverse Effect. A "Material Adverse Effect" means any

     material adverse effect on the business, condition (financial or other),

     results of operations, properties or prospects of the Company and its

     subsidiaries, taken as a whole.

 

          (v) The Co-Issuer has not conducted any activities except in

     connection with the Transactions.

 

          (vi) Each of Holdings, the Co-Issuer and, on the Closing Date, the

     Company and the Guarantor has all requisite corporate power and authority

     or all requisite power and authority under its partnership agreement and

     the Delaware Revised Uniform Limited Partnership Act, as the case may be,

     to execute, deliver and perform all of its obligations under the

     Transaction Documents to which it is a party and to consummate the

     transactions contemplated by the Transaction Documents to be consummated on

     its part and, without limitation, each of the Company and the Co-Issuer has

     all requisite corporate or other power and authority to issue, sell and

     deliver and perform its obligations under the Notes and, on the Closing

     Date, the Guarantor has all requisite corporate power and authority to

     execute, deliver and perform all its obligations under its Guarantee.

 

          (vii) This Agreement has been duly and validly authorized, executed

     and delivered by Holdings and the Co-Issuer. On the Closing Date, a Joinder

     Agreement has been duly and validly authorized, executed and delivered by

     the Company and the Guarantor.

 

          (viii) On the Closing Date, the Indenture has been duly and validly

     authorized by the Company, the Co-Issuer and the Guarantor and, when duly

     executed and delivered by each Issuer (assuming the due authorization,

     execution and delivery thereof by the Trustee), will be a legal, valid and

     binding obligation of each Issuer, enforceable against it in accordance

     with its terms, except as the enforcement thereof may be limited by

     bankruptcy, insolvency, reorganization, fraudulent conveyance, moratorium

     or other similar laws affecting the enforcement of creditors' rights

     gener-

 

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     ally and by general   principles   of equity and the   discretion of the court

     before which any proceeding   therefor may be brought.   The Indenture,   when

     executed   and   delivered,   will   conform in all   material   respects   to the

     description thereof in the Offering Memorandum.

 

          (ix) On the Closing Date, the Original Notes have been duly and

     validly authorized for issuance and sale to the Initial Purchasers by the

     Company and the Co-Issuer and, when issued, authenticated by the Trustee

     and delivered by the Company and the Co-Issuer against payment therefor by

     the Initial Purchasers in accordance with the terms of this Agreement and

     the Indenture, the Original Notes will be legal, valid and binding

     obligations of each of the Company and the Co-Issuer, entitled to the

     benefits of the Indenture and enforceable against each of the Company and

     the Co-Issuer in accordance with their terms, except as the enforcement

     thereof may be limited by bankruptcy, insolvency, reorganization,

     fraudulent conveyance, moratorium or other similar laws affecting the

     enforcement of creditors' rights generally and by general principles of

     equity and the discretion of the court before which any proceeding therefor

     may be brought. The Original Notes, when issued, authenticated and

     delivered, will conform in all material respects to the description thereof

     in the Offering Memorandum.

 

          (x) On the Closing Date, the Exchange Notes have been duly and validly

     authorized for issuance by each of the Company and the Co-Issuer and, when

     issued, authenticated by the Trustee and delivered by each of the Company

     and the Co-Issuer in accordance with the terms of the Registration Rights

     Agreement, the Exchange Offer and the Indenture, the Exchange Notes will be

     legal, valid and binding obligations of each of the Company and the

     Co-Issuer, entitled to the benefits of the Indenture and enforceable

     against each of the Company and the Co-Issuer in accordance with their

     terms, except as the enforcement thereof may be limited by bankruptcy,

     insolvency, reorganization, fraudulent conveyance, moratorium or other

     similar laws affecting the enforcement of creditors' rights generally and

     by general principles of equity and the discretion of the court before

     which any proceeding therefor may be brought.

 

          (xi) On the Closing Date, the Guarantee has been duly and validly

     authorized by the Guarantor and, when executed and delivered and, when the

     Original Notes are issued, authenticated by the Trustee and delivered by

     the Company and the Co-Issuer against payment by the Initial Purchasers in

     accordance with the terms of this Agreement and the Indenture, will be the

     legal, valid and binding obligation of the Guarantor, enforceable against

     it in accordance with its terms, except as the enforcement thereof may be

     limited by bankruptcy, insolvency, reorganization, fraudulent conveyance,

     moratorium or other similar laws affecting the enforcement of creditors'

     rights generally and by general principles of equity and the discretion of

     the court before which any proceeding therefore may be brought. The

     Guarantee, when executed

 

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     and   delivered,   will conform in all material   respects to the   description

     thereof in the Offering Memorandum.

 

          (xii) On the Closing Date, the guarantee to be endorsed on the

     Exchange Notes has been duly and validly authorized by the Guarantor and,

     when executed and delivered and, when the Exchange Notes are issued,

     authenticated by the Trustee and delivered by the Company in accordance

     with the terms of the Registration Rights Agreement, the Exchange Offer and

     the Indenture, will be the legal, valid and binding obligation of the

     Guarantor, enforceable against it in accordance with its terms, except as

     the enforcement thereof may be limited by bankruptcy, insolvency,

     reorganization, fraudulent, conveyance, moratorium or other similar laws

     affecting the enforcement of creditors' rights generally and by general

     principles of equity and the discretion of the court before which any

     proceeding therefor may be brought.

 

          (xiii) On the Closing Date, the Registration Rights Agreement has been

     duly and validly authorized by the Company, the Co-Issuer and the Guarantor

     and, when duly executed and delivered by each of the Issuers (assuming the

     due authorization, execution and delivery thereof by the Initial

     Purchasers), will constitute a legal, valid and binding obligation of each

     of the Issuers, enforceable against each of them in accordance with its

     terms, except that (A) the enforcement thereof may be limited by

     bankruptcy, insolvency, reorganization, fraudulent conveyance, moratorium

     or other similar laws affecting the enforcement of creditors' rights

     generally and by general principles of equity and the discretion of the

     court before which any proceeding therefor may be brought and (B) any

      rights to indemnity or contribution thereunder may be limited by federal

     and state securities laws and public policy considerations. The

     Registration Rights Agreement will conform in all material respects to the

     description thereof in the Offering Memorandum.

 

          (xiv) All taxes, fees and other governmental charges that are due and

     payable on or prior to the Closing Date in connection with the execution,

     delivery and performance of the Transactions shall have been paid by or on

     behalf of the Issuers at or prior to the Closing Date except for any such

     taxes, fees and other governmental charges (i) as to which no Initial

     Purchaser or holder of the Notes will have any liability and (ii) as could

     not reasonably be expected to have a Material Adverse Effect.

 

          (xv) None of the Issuers is (A) in violation of its charter, bylaws or

     other constitutive documents, (B) in default (or, with notice or lapse of

     time or both, would be in default) in the performance or observance of any

     obligation, agreement, covenant or condition contained in any bond,

     debenture, note, indenture, mortgage, deed of trust, loan or credit

     agreement, lease, license, franchise agreement, authorization, permit,

     certificate or other agreement or instrument to which any of them is a

     party or by which any of them is bound or to which any of their assets or

     properties is subject (collectively, "Agreements and Instruments"), or (C)

     in violation of any law, statute,

 

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                                      -13-

 

     rule, regulation, judgment, order or decree of any domestic or foreign

     court with jurisdiction over any of them or any of their assets or

     properties or other governmental or regulatory authority, agency or other

     body, except, in the case of clauses (B) and (C) herein, for such defaults

     or violations as could not reasonably be expected to have, either

     individually or in the aggregate, a Material Adverse Effect. There exists

     no condition that, with notice, the passage of time or otherwise, would

     constitute a default by the Issuers under any such document or instrument

     or result in the imposition of any penalty or the acceleration of any

     indebtedness, other than penalties, defaults or conditions that could not

     reasonably be expected to have, individually or in the aggregate, a

     Material Adverse Effect.

 

          (xvi) The execution, delivery and performance by each Issuer of the

      Transaction Documents to which it is a party, including the consummation of

     the offer and sale of the Original Notes, does not and will not violate,

     conflict with or constitute a breach of any of the terms or provisions of

     or a default under (or an event that with notice or the lapse of time, or

     both, would constitute a default), or require consent (that has not been

     obtained prior to the Closing Date) under, or result in the creation or

     imposition of a lien, charge or encumbrance on any property or assets of

     any of the Issuers (other than as created pursuant to the New Credit

     Agreement and the documents relating thereto) or an acceleration of any

     i